According to new data released Wednesday, applications for mortgages to buy homes or refinance existing loans have fallen in the United States to their lowest level in 22 years.
Last week’s demand for mortgages was not seen since February 2000, according to figures released by the Mortgage Bankers Association, an industry organization.
Rising interest rates and strong inflation are being felt in the mortgage market, especially in refinancing, which is much more sensitive to rate changes.
Last week, refinancing applications fell by 80% compared to the same period the previous year and were at their lowest level in more than two decades.
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Meanwhile, demand for home purchase mortgages fell 7% one week ago and 19% in the year-over-year comparison.
With rates rising and prices skyrocketing, the housing market has begun to cool down, as confirmed by other figures released today.
As reported by the National Association of Realtors, sales of previously owned homes in June fell 5.4% from May and 14.2% from June 2021, which for the first time in three years has increased the “stock” of available homes and apartments.
Prices, meanwhile, continued to rise to put the median price at $416,000, a 13.4% up from a year ago and a new all-time high.
Analysts point to the high cost and rising interest rates as the main reasons for this slowdown in a market that recently was gaining strength and expect sales to continue to fall given the economic climate.